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Operational Risk Management In The Financial Service Companies--In The Case Of The Banks

Posted on:2004-06-03Degree:MasterType:Thesis
Country:ChinaCandidate:L ZhangFull Text:PDF
GTID:2156360125455653Subject:Finance
Abstract/Summary:PDF Full Text Request
Risk management is the core of the Finance. It reduces the cost of risk management, improves the competition, and results the financial service companies is run well. The risks in the financial service companies are form of the credit risk, the market risk and the operational risk. The credit risk management and the market risk management have a good development, but the operational risk management is in the primary phase.It increases the operational risk that the acceleration of the global financial services, the development of the financial technology and the release of the financial regulations. It is noticeable that the loss caused by the operational risk is just less than the loss by the credit risk.The operational risk is the risk of loss resulting from inadequate or failed internal processes, people and systems or from external events. The loss events from the operational risk involve in the internal fraud, the external fraud, the damage to physical assets, the business disruption and system failures, and so on. The regulatory models of the operational risk are consisted of the basic indicator approach, the standardized approach and the advanced measurement approach, which include the internal measurement approach, the loss distribution approach and the scorecard approach. The qualitative methods to measure the operational risk are composed of the self-assessment, the risk map, the key risk indicators and the scenario analysis.It is concluded that the factors which affect the probability of the loss divide in the internal fraud, the external fraud and employment practices, the process management, external events, clients management and the system problems, in the form of the questionnaire filled by the employees of banks in Hangzhou. It is also the conclusion that the factors which affect the severity of the loss consist of the fraud issue, the process problem and the system failures, specially the first. We should have the stronger internal management, the more training, the more information disclosure. We should collect the loss data andset up the basis frame of the operational risk management.
Keywords/Search Tags:financial service company, operational risk, risk identification, risk assessment
PDF Full Text Request
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